•To insist on repurchase clause
APPARENTLY determined to sell off some national assets including the Nigerian Liquefied Natural Gas (NLNG) company, the federal government has hinted on plans to ensure that it has the opportunity to buy them back if sold.
The government is considering a proposal on the sale of the assets as a means to raise much needed foreign currency to beef up the dwindling foreign reserves of the country.
Facts emerged from the Presidency on Monday that government plans to introduce a repurchase clause in any sales agreement it may enter into on the sale of the national assets.
Top Presidency revealed in Abuja that the federal government has no plan to sell-off its shares outrightly in the NLNG, where it owns 49% shares and the balance 51% owned by private foreign interests.
The source volunteered that what the government might consider is to reduce its current 49% shares by 5% so that its shares might be slightly reduced to 44% or thereabout to raise the much needed dollars.
“The federal government doesn’t own the entire gas company, and will certainly not sell-off its entire shares, but is open to the possibility of selling down its 49% ownership by 5% or thereabout,” the source said.
It was keen to stress though tha the such decision was yet to be taken at all.
The source added that as in other potential asset sales, there would be a repurchase option that guarantees the federal government an opportunity to buy-back any such assets if circumstances change anytime in the future.
The federal government is considering the sale of some national assets in order to beef up its foreign reserves.
The government is working on the assumption that with foreign reserves of the country shrinking, there is a need to take some drastic steps to shore up the reserves.
It is hoping that an injection of about $15 billion into the reserves will have a positive impact on the entire economy as a multiplier effect.
Presidency source confirmed a proposal that would enable the federal government to raise between $10 to $15 billion quickly from asset sales.
It is considered an imperative as the monthly foreign earnings of the country has dropped drastically to as low as about $300m in some months this year.
The presidency source said while there has been no list drawn-up of the proposed assets to be sold, there is a clear decision not to sell any critical asset of the country and certainly no plan to outrightly sell-off any asset whatsoever.
It added: “Some of the intended sales could be in form of time-bound leases, advance renewal payments on leasing licenses and concessioning which would attract buoyant signature fees.”
“If we even want to sell down certain assets, while our target is to get foreign currency, specifically dollars, the option would also be opened to Nigerians at some point to buy limited shares through the Nigeria Stock Exchange.”
The source also spoke on the concessioning of the East-West lines of the Nigeria Railways which it said was almost a done deal, saying that General Electric (GE) would be the concessionaire, and would invest invest $2 billion into the Nigerian economy including for the refurbishment of the single-gauge lane of the lines.
Under the deal, GE is expected to hire back some of the laid off staff of Nigeria Railways and also open a Transport University in Nigeria while building/assembling train coaches here in Nigeria.
The federal government would also receive a signature fees in foreign currency as it would in other assets that might be concessioned.
“The important thing to keep in mind is that the sales down of some of the assets is an option to raise the much needed dollars at a critical time for the Nigerian economy,” the source noted.
It added that if and when such a sale is done, “Nigerians can be sure that there would be no shady deal considering the character of the Nigerian leadership at this time.”
“Generally whatever we sell, we shall get real value for, and we shall include a repurchase clause into any such sales agreements,” the Presidency source noted.